Case Study

Topic 1.1

e-Facilitation of Compliance: Taxpayer services via Internet

Beatriz Gloria Viana Miguel General Director State Administration Agency ()

Contents: 1. Presentation.- 2. Development of electronic services in the AEAT.- 3. Brief description of the AEAT Internet website.- 4. The electronic site.-5. AEAT staff training.-6 Analysis of the taxpayers opinion.- 7. Further information on electronic administration in the AEAT.- 8. Conclusions

1. PRESENTATION

The State Tax Administration Agency of Spain (AEAT in Spanish) purpose is the effective implementation of state tax and system and its main mission is to assess and collect . It operates in two activity areas of strategic policies, on one hand the incentive for voluntary compliance of taxpayers’ obligations and, on the other hand, the fight against tax fraud.

The Agency states in its Service Charter the services provided, the rights of citizens, their commitment to quality and indicators to measure compliance; it maintains and deepens the lines of action, renewing its commitment to quality of services provided, with attention to the possibilities offered by technological advances and trying to anticipate new needs that may be offered to the public.

The main commitments are as follows:

• To improve personalized attention. Offering specialized treatment depending on the profile of each taxpayer. • Managing clear and accurate information. • Flexibility and simplicity of tax procedures, reducing the processes and unnecessary administrative procedures. TOPIC 1.1 (Spain)

• Offer new channels for relations with taxpayers and facilitate payment of tax debts. Flexible and fluid communication with the public. • Use of the latest technologies. • Effectiveness and efficiency of all tax procedures; and finally • Continuous adaptation to the socio-economic environment and the changing needs of citizens.

To carry out these commitments, the Agency has been a pioneer within the Spanish public sector in the development of Electronic Administration and the use of a digital platform as a strategy for information dissemination and for strengthening its institutional image.

The work was conducted primarily through its own developments, reinforced by outsourcing services for specific issues and in some cases, by the combination of both and has required the publication of a series of regulatory provisions, for adaptation of earlier texts and for normative development of new procedures.

This has enabled a significant costs reduction, both monetary and in time and effort, and makes it possible for the human resources, being more scarce than other administrations in the area, however, in order to achieve, a high degree of efficiency and effectiveness in meeting the targets thanks also to a high level of expertise achieved through the selection and training processes.

But all the Spanish administration is undergoing a modernization process in the framework of the European Union strategies. The Lisbon Strategy (2000) has meant a turning point in the development of policies for the Information Society within the European Union.

The purpose of the Lisbon Strategy was to make Europe in 2010, the most competitive and dynamic economy, knowledge-based and capable of sustainable growth with more and better jobs and greater social cohesion.

To achieve these purposes a series of policies had to be developed, among them, the promotion of Information Society by Improving the Information and Communication Technologies. For this purpose the European Commission in 2005 launched the "2010 iProgram", which considered the European level as well as the national reforms.

In connection with this European initiative in 2005 the Spanish Avanza Plan, was also launched for the period 2006-2010, with a budget five

30 TOPIC 1.1 (Spain) times the amount spent on the Information Society in the previous four years.

In relation to the area of digital Public Services, the Plan was aimed at getting a fully developed Electronic Administration and guaranteeing the right of citizens and companies to interact electronically with Public Administrations.

To achieve these purposes, a series of measures were conducted, including some direct execution, promotional measures and legislation measures.

In 2007, the domestic legal framework for the Electronic Administration in Spain was established by Law 11/2007, which recognizes, from January 1, 2010, the right of citizens to communicate electronically with the administrations and the correlative requirement for Administrations to provide electronic services. This applies to all territorial authorities at central, regional and local levels.

Effective implementation of the Law required new regulatory developments, and Royal Decree 1671/2009, of the Ministry of the Presidency, which regulates various aspects of the Electronic Administration such as the electronic offices, electronic identification and authentication, electronic records, notices and electronic document or electronic files, the Royal Decree 1363/2010, of the Ministry Economy and Finances on mandatory electronic notifications in the area of the AEAT, and the Royal Decree 3/2010 and 4/2010 of the Ministry of the Presidency, for implementation of the National Security Scheme, responsible for establishing common criteria and security levels for the management of the expected information and the Interoperability National Scheme that allow to share solutions and information.

Avanza Plan 1 and Law 11/2007 purposes were achieved with success in 2010; and this was recognized by granting Spain the United Nations Award for Public Service 2010 for having advanced 11 places in the world rankings on electronic Government to be placed number 9.

The Electronic Administration improves the operation of the Administration as a whole because it makes possible:

• Greater speed and agility. Can reduce processing times and simplify procedures.

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• improvement in effectiveness. Allows personalized treatment to millions of citizens.

• improvement in efficiency. More proceedings can be made ​​at lower cost.

• interconnection between Administrations. Allows the interconnection between the Administrations and therefore they will exchange information, ensuring confidentiality and its proper use.

• environmental sustainability. Saving paper, as we become use to not print the electronic documents.

Therefore, the following advantages for the AEAT can be indicated:

• Online availability of the documentation required to manage the internal work, thereby reducing processing times, especially as the digitization of the documents submitted on paper is generalized.

• The documentation on paper is filed on the site where it came from and does not travel so it gains in security.

• Better definition of procedures and standards of the casuistic.

• Increased effectiveness, by improving management procedures and greater efficiency, since more procedures can be performed in less time.

• Improved corporate image.

All these progresses in matters of electronic channels are evolving. Currently is required to perform only certain procedures by electronic means for corporations and entrepreneurs, but not for all.

Therefore, although we are in the context of Electronic Administration, we are in a process of evolution, since not all taxpayers may be required to use it.

2. DEVELOPMENT OF ELECTRONIC SERVICES IN THE AEAT

The implementation of electronic service provided to taxpayers, which began in 1996 through the Internet website of the Tax Agency, is neither easy nor immediate.

To mention some important points in the implementation process of these electronic services, we should mention the creation in 1998 of a secure virtual office for of individuals (IRPF in Spanish)

32 TOPIC 1.1 (Spain) and monthly tax returns of large companies, and its extension to other taxes and services in subsequent years.

Since 2003 there has been a strong impetus to electronic services, making possible the submission of returns through social collaborators, voluntary electronic notices, the transmission of data between administrations (with the person consent) and the recognition of new certification authorities.

The registration of empowerments to carry out procedures and actions on the Internet was created in 2004

The possibility to act with an electronic ID was introduced in 2006, on the same year the web for specific registry requirements and procedures was created and the warning on mobile phone to communicate the reimbursement payment of IRPF, the next expiration date of deferment, the granting of an application for compensation or payment installment, communicate the reference number to enter the income website of the Agency etc. was also introduced that year.

In 2007 came into force the aforementioned Law 11/2007, citizens’ electronic access to public services, which has been the legal framework for the launch of the Electronic Office on January 1, 2010.

The Electronic Office replaces the old virtual office and it is a further step towards an integrated approach to electronic service provided to taxpayers.

Throughout this process there has been a constant interaction between the obligations from the already exposed regulatory development of the Electronic Administration, both at European and national levels and the purposes set in the AEAT, improving taxpayer assistance through electronic Services.

The implementation of the Law supposes for the Tax Agency a major challenge.

Although the Agency was already well advanced in the field of electronic services, it has been necessary to adapt procedures and applications to the requirements of Law 11/2007. It is not an option but an obligation for the Agency, which has been required to enable citizens to exercise their rights under the Law from January 1, 2010.

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These rights are as follows:

1. The right to use electronic channels in their relations with the Public Administrations. 2. The right not to provide data and documents already submitted to Public Administrations. 3. The right to know by electronic means the status of procedures in which they are interested. 4. The right to make payments electronically 5. The right to obtain electronic copies of electronic documents pertaining to administrative records. 6. The right to use electronic identification techniques.

The correlative duties imposed upon the tax Administration are the following:

1. Creating an electronic office. 2. Create an electronic register where citizens can submit their electronic documents. 3. Creation of an electronic file 4. Payment Gateway 5. Electronic inventory 6. Using electronic identification techniques to ensure authenticity.

As a result of this Law, the Administration of the Central Government guarantees all citizens access to electronic services through a multi- channel system:

• a. On site assistance offices, which make ​​available to citizens, in an open and free way, the media and tools needed to exercise the rights under Article 6 of Law 11/2007, and must have assistance and guidance on their use, either by the staff of the offices in which they are located, or via systems embedded in the media or instrument.

• B. Electronic Access Points, which consist of electronic sites created and managed by departments and public services and available to citizens through communication networks.

• c. Call center services, to the extent that the safety criteria allows it, enabling citizens the access to the information and electronic services.

The operation of all the rules of the Electronic Administration is a work entirely developed by the Agency’s employees, working in a multidisciplinary team. The number of employees directly involved in the adaptation to the Law 11/2007 is 400, excluding directors.

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At the present time, the citizen can choose, for any process, electronic filing or filing on paper.

Moreover, in the design of electronic services has been taken into account how companies operate, the pressures they suffer and the procedures used and effective means of communication with them have been studied, to attract their interest. The standardization of names of procedures and services, the standardization of procedures, in particular, registration procedures or the standardization of consultation status can be mentioned as examples of the work carried out.

Standardization has been sought, but also favored by the creation of horizontal applications which connect with different management applications of the procedures.

3. BRIEF DESCRIPTION OF THE AEAT INTERNET WEBSITE

As it can be seen, the field of electronic services has experiences in Spain a great evolution from its beginning as a mere information tool and its development as a means of communication with the taxpayer to have become his active participation tool by electronic media in tax procedures.

The services are centralized through the Tax Agency website, which contains:

3.1 Agency Information with institutional information, information campaigns, information on Civic Education, Tax Planning, Electronic Office statistics and special information on the Central Delegation of Large Taxpayers, within which it is reported, among other things, Big Business Forum and the Code of Best Practices.

3.2 Information directed to three groups: citizens, companies and professionals and collaborators

A) Under the block «Citizens» the “electronic transactions” screen can be accessed, through which taxpayers can check their tax records, census data and their notifications, as explained below. B) The block “Companies and professionals’ group the information relevant to individual entrepreneurs and professionals, companies, large companies and non-residents. C) The heading “Collaborators” includes, for example, information from the Partnership Forum and Professional Tax associations, recently operating in March 2011 and includes models of

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authorization procedures for social collaborators, which can perform multiple actions by electronic means on behalf of third parties

As with all other information services, it seeks to use a clear and concise language, capable of conveying to citizens normative rules in a clear way and provides each taxpayer with the responses to information requirements that apply to their tax profile.

Enable easy access and a simple declaration forms have been achieved and this has made ​​possible higher automatic taxation, the systematization and access to relevant personal information, simplifying the tax system and the reduction of standards.

The accessibility to the Agency’s website has obtained the Certification of Accessibility Euracert, double-A level.

3.3 other services provided through the website

- Forms and assistance programs, classified and organized, and their instructions and rules can be downloaded in PDF.

- Includes a history of updates per months of last and current year, and it allows the subscription to the Updated Information Service.

- It has enabled a section of computer queries resolution, which is attended by calling real-time online helpers, remote electronic support, and even by computer support on Twitter.

- A Taxpayer calendar is available and a section of Frequently Asked Questions and errors, which has a great practical use in the Administration-taxpayer interaction and, in particular as regards to the use of computers.

An example of the frequently asked questions is all about electronic invoicing.

This section answer, for example, the question of whether taxpayers can convert their paper invoices to electronic format and the answer is that they can convert any original document, if the digitalization software used has been approved by the Agency and also reports the Decree of the Ministry of Finance that regulates it.

Regarding electronic invoicing, it should be mentioned the Agency website also discloses the specifications required for the electronic invoice to be accepted by the Agency in relations with its suppliers

36 TOPIC 1.1 (Spain) deriving from the procurement of works, supplies, technical assistance and services.

These specifications should be observed in the files of invoices and generating electronic data transmission providers that the Agency should use when choosing this method of invoicing and have been developed in collaboration with all depository financial entities, associates of the Agency in the collection of taxes and revenues of public law.

In this process, the recommendations given in the fields by the EU and OECD have been taken into account, in the light of experience in trade relations, both private and public.

3.4 Pilot Experience that has developed during the month of February 2012 to provide tax and customs information over the Internet to citizens who request it and which have the electronic certificate or the eID.

Within the area of Customs, inquiries have been received relating to special taxes, Customs management and INTRASTAT.

On taxation issues, the pilot test is restricted for answering requests for information concerning the concept of Income Tax of Individuals.

In both cases, the experience has taken place on a limited territory, since only requests from the territorial areas of special delegations of Catalonia, the Canary Islands and Asturias has been answered.

4. THE ELECTRONIC SITE

Once some identity signs of the website have been mentioned, we must further deepen the analysis of services provided to taxpayers and talk about a key project in both the present and the future of the Spanish Tax Administration: The Electronic site, as mentioned earlier, has been launched on January 1, 2010 and replaces the old virtual office.

From the perspective of the taxpayer, the Electronic site is a point of access to services that require identification and authentication of citizens or of the administration.

Its main purpose is to allow taxpayers to perform all their tax procedures and formalities through it.

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It is equipped with special conditions for identification, security and accountability, while ensuring accurate, current and complete information.

Citizens can, at this time, do all the procedures and consultations required 24 hours, 365 days a year.

In the consultations, the service called “My Files” should be mentioned, taxpayers that have an electronic ID or electronic certificate issued by any authorized entity, may know the status of files processing that they are interested in, when their electronic processing procedures have initiated after the 01.01.2010.

From the perspective of the Tax Administration, we can speak of six main blocks of activities, which are developed through the Electronic Site:

4.1 New Registration application.

Law 11/2007 provides the possibility to convert paper-based documents into electronic documents according to specific scanning systems listed in he Law itself, giving them the character of true copy.

Thus, once a document is submitted on paper, any administrative body can digitize it, so from that moment only the electronic document and not the original paper format will be sent.

In this regard, the Agency in December 2009 has already given the instruction, the obligation to digitalize, applicable to applications forms, documents and communications on paper that are presented in the registry offices of the tax agency, both in person and via the various postal services.

These Registration Offices include the General Registry, located at Central Services, and the auxiliary Registrar’s Offices in regional headquarters.

Thus, any document presented is properly digitalized. After cataloging and assigning it to the competent administrative office, it is linked to the appropriate file and properly incorporated into corporate databases, where it will be accessible at all times, both citizens to whom the proceedings relates to, and the responsible officials.

It should be noted that, once the original documents on paper are digitalized, these will no longer be used because:

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- The taxpayer would be informed in electronic format (either online or copied to CD / DVD).

For a paper copy request of any document, the digitalized documents incorporated into the electronic file will be printed, together with the measures generated from the Electronic File application itself, a justification of the authenticity and integrity of those documents.

- For the Economic-Administrative Courts, the Administrative Jurisdiction or Criminal Jurisdiction, only files in electronic format are received, subject to that exception, the Court may request a transfer of an original document on paper.

The development of the application for registration has been done with excellence criteria, following a development model that provides for the reduction of administrative burdens, simplification of procedures and benefits for citizens and Administrations.

Therefore, the new application Registry has implied a great amount of work in reviewing the inventory of all the procedures of the Tax Administration and formalities that can be performed in each procedure.

The total number of procedures and services of the Agency with significance to the taxpayer is 443 and the number of internal procedures is 134, bringing a total number of procedures and a service of the Agency is 577.

The Registry application incorporates an element of high value-added such as to facilitate that the documents submitted by taxpayers reach the officials who administer specific files that are linked to documents and, moreover, allow electronic documents to be assigned to final users as quickly as possible, avoiding the problems of physical transfer of documents.

Therefore, the new registry application not only supports the control of the submitted documents by citizens but also is configured as a tool for integral management of documents since they enter into a Register of the Agency until they reach the official who is handling the case.

As a result of the work performed, the new application has required changes and adaptations to the working modes of the offices and specific officials who are responsible for different tasks to be performed on the documents.

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Thus, currently, in compliance with the provisions of Law 11/2007, citizens can choose the electronic filing for any processing of any procedure of the Agency’s tax service

For those cases in which, at the present time, the initiation or electronic communication is not possible, a initial and communication form in the Electronic Register has been developed, through which non- standard electronic documents can be submitted to the Tax Agency (for example, claims in a procedure).

The procedures, services and formalities that can be carried out on the Internet include, among other actions relating to:

1. Taxes

Presentation of tax returns models on Personal Income Tax, VAT, Corporations, Special taxes, Tax Registration, Non-Resident Income Tax, payments to accounts, informative statements, etc.

Among the informative statements it may be of interest to quote some examples, such as the annual returns of transactions with third parties, the annual return of certain income received by individuals resident in other Member States of the European Union and other countries and territories with which has been established an exchange of information or the annual returns of operations performed by entrepreneurs or professionals adhering to the collection management system via credit or debit card.

Comparing the system of traditional filing with the presentation over the Internet it can be seen as the main substantial difference that in the second one have only adapted to new technological tools the two essential elements of the process:

- The first is the signature (traditionally, the taxpayer signed his own tax return and on the Internet the taxpayer files with the electronic signature).

- The second element is the acknowledgment of the Administration.

In the traditional system the administration or the collaborating financial entity making ​​the returns files returned them back to the applicant duly sealed, certifying that the statement was submitted.

In the Internet system, the Agency sends back a return code (electronic seal), certifying that the returns has been submitted online and accepted.

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The advantages of filing via internet are many and important, for both, the taxpayer and for the Administration.

• advantages for the taxpayer

The taxpayer can file his/her return conveniently from any location (home, office etc.) and with no need for displacement or waiting.

Also has the flexibility to file returns without having to adjust to the Tax Administration opening hours.

As new requirements for the taxpayer derived from Electronic Administration, most procedures require an identification system, electronic ID and/or electronic certificate (e.g. VAT and ).

However, in order to facilitate for the majority of taxpayers the electronic exercise of their tax obligations, in some cases these requirements are simplified.

Thus, in the case of the income tax returns draft, the current system of identification related to the electronic processing can be the electronic certificate or the electronic ID as identification through their Tax Identification Number (NIF) and name and Reference number of the draft or a specific field of the previous year income tax.

In case of informative statements, they should be electronically submitted or at the Agency’s Offices, in support directly readable for the computer, but in some cases a printed presentation is admitted, when it does not exceed 15 records.

For each procedure capable of processing electronic formalities, a page with general information about the procedure, the information related to the electronic processing and the applicable regulation has been designed and placed in the electronic office for consultations.

• advantages for the Tax Administration

The first advantage of the processing of taxes over the Internet is immediacy, because the statements are available for immediate process, avoiding the delay caused in the collaborator financial institution, in the Post Office and other classification and reading or recording processes performed in the Administration. This is particularly interesting for reimbursements.

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The second major advantage is the correction, the statements submitted by Internet are correct (no errors) and this is particularly interesting in the case of informative statements. Regarding the management of information, to be automated does not require the employment of personnel for processing, which means lower costs.

Another important advantage is the non-localization, since returns from taxpayers assigned to any administration or Delegate Agency can be submitted.

Finally, it is important to mention the adaptability of the system; it is a service adapted to the current entrepreneur needs and in line with the evolution of new technologies.

These advantages also apply to the rest of procedures performed via internet.

We must make an express reference to the possibility offered by the Income Tax Law 35/2006, which states that taxpayers may request to the Tax Administration to submit, for information purposes, a draft statement if the incomes are exclusively from the following sources: a) Income from work. b) Income from property capital subject to withholding or payment on account. c) Imputation of income property if they are from a maximum of two properties. d) Profits from assets subject to withholding or payment into account, as well as subsidies for the purchase of the residence.

The taxpayer may know, through the Agency’s Electronic Office, the draft statement that has been prepared by the Administration with the relevant information available (called “fiscal data”) and the calculations established by law.

If the taxpayer believes that the draft reflects his tax situation, he can sign and confirm it (by electronic means, by telephone as well as at the Agency’s offices). In this case it should be considered as a tax return.

If he does not believe that it reflects his situation, a correction can be called when it is considered necessary to add personal or financial data not included in it, or warn that it contains erroneous or inaccurate data.

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To carry out this assistance work it is necessary to be available in time and form, the data provided by the informative statements that the rest of taxpayers must submit to the Agency. Hence the special importance the informative statements have for the Tax Administration.

Therefore, during the period for submission of informative statements (January in the case of Spain) and once it ends (to 01 March, the draft delivery date), the Tax Agency performs another important assistance work, helping taxpayers in the preparation and electronic filing of these statements.

This work includes, in addition to the services available through Internet, phone calls, meetings with companies, technical assistance and informative sessions.

The procedures for reimbursement of taxes paid are also likely to start and processing electronically (although returns drafts can also be submitted at the Agency’s offices and through collaborators).

In these cases, the Administration reviews the documentation submitted and contrasts it with the data and background that are in its possession. In case the requested reimbursement is recognized, the agreement shall be notified by the banks transfer receipt or, by the check if it is the case.

Notifications to be produced may also be made ​​electronically, where appropriate.

2. Custom:

Among other actions, the presentation of summary statements and cargo manifests, presentation and delivery of statements, requests for approvals for premises, applications for Authorized Economic Operator or for authorizations customs regimes etc. can be mentioned.

For example, in the case of the summary statement of unloading of goods brought by sea, the statement may be submitted on paper or electronically via the Internet or at the Port Authority or the Tax Agency under the one-stop window Agreement between the Agency and the State Ports. In air transport the submission is made ​​directly to the Agency.

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3. Census: can be performed, among others:

High and low modifications census statements, statement for of address changes and / or personal data changes, statement of high or low variation on the tax Economic activity when managed under the Agency, answer requests from the Administration intended to ascertain the census information declared by the taxpayer, etc..

4. Tax certificates:

Application for tax status certificates, issued at the request of the taxpayer for various purposes such as certificates for contractors and subcontractors, tax residence certificates, certificate of goof standing on tax obligations, required to participate in bidding procedures with the Public Administrations, etc.

5. Actions on collection matters:

Filing and completion of all paperwork using available forms in the electronic sites, answering the requirements, debt consultation with links to have payment letters, checking the processing status of procedures, submission of claims and/or documents or invoices, requests for extension of deadlines, etc..

6. Tax benefits and authorizations: The following actions could be performed:

Presentation of models to request advance payment of maternity deduction or for example the recognition of the right for an exemption of the IRPF for certain literary, artistic or scientific awards.

Prior agreements of valuation remunerations in kind of the personal work can be requested, in order to determine the corresponding payment to the IRPF account, the application for special depreciation schemes for corporate tax, etc. can also be submitted.

This section also includes, for example, the procedure for requesting authorization of an electronic invoice system, in which the applicant must submit an application specifying the means it intends to apply to guarantee the authenticity of the origin and content integrity of electronic documents issued. The Inspection Department may authorize or deny the proposed system.

Another procedure allows processing the homologation of invoice digitalization software certificate. In this case, the applicant must submit,

44 TOPIC 1.1 (Spain) together with the application, a description of technical standards that underpin the certified digitization process and the protocols and security standards and procedures, control and operation related to the creation and database consultation of documents containing digital images of original paper documents supplied by the taxpayer and the electronic signature systems used.

7. Fiscal vouchers and disciplinary proceedings: the following competences can be mentioned:

Answering requests made ​​under the inspection research and checking procedure, provision of vouchers for verification procedures of foreign trade data or for value vouchers, etc.

8. Requirements and communications:

Answering requirements and provision of evidence in proceedings conducted by the Tax Management, Customs, Collection and Inspection Departments.

It is also possible to perform some actions in the framework of resources and economic-administrative claims, as e.g. submissions in filing a claim or written allegation or claim back guarantees granted and proceed with complaints and suggestions to the Taxpayer Defense Council.

4.2 The electronic file:

The new registry program developed by the Agency has been a requirement to take a further step in the process of electronic service to the taxpayer with the development of Electronic file, and the Law 11/2007 is, as well, the starting point of its regulation.

The electronic file is the set of electronic documents that correspond to an administrative procedure, whatever the type of information they contain.

Taxpayers can check their records through the Electronic Site, accessing with a digital certificate or an electronic ID.

The development of electronic file has been made ​​possible by the implementation of Registration, because it allows having available documents properly cataloged and digitalized from the moment of their receipt.

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A same document can be part of various electronic files and the index of the electronic record replaces the files numbered.

The electronic record streamlines the processing of procedures facilitates the accessing of taxpayers and has an important advantage for the administration, allowing work from a different place other than the one where the file is located and therefore, a better use of available resources is possible.

The current task is to make progress in the integrated management in electronic format of all documents involved in each procedure of the tax Agency, regardless that these documents are on paper or electronic.

And speaking of procedures, it is necessary to include both which occur within the organization as well as in its external relations, with taxpayers, Economic-Administrative Courts, Courts of Justice and other government entities or institutions of public law etc.

In this sense, the Electronic File application is not just a documentation file mechanism, but the support of the documents comprising the record from the time of its creation or production in electronic format, or from the moment of the digitalization of original documents on paper.

The implementation of the electronic file is gradually carried out in the Agency.

For example, in the areas of tax inspection and Customs and special tax inspection, the electronic file is formed, since 2010, from the beginning of the procedure.

Thus, in the inspection area, the formation of the verification file and research must be made ​​electronically from the initial time of processing the file.

The electronic documentation will be the only one constituting the precedent of the settlement agreements that are dictated and, in case of appeal, will be referred to the courts.

Therefore, in the management, identification and preservation of electronic documents, the same zeal previously used for the management, custody and indexing of files on paper must be applied.

However, in the areas of tax management, management of large companies and collection, the electronic file will be formed when an

46 TOPIC 1.1 (Spain) economic and administrative claim is presented, so for now, it is not created for all files of these areas.

This is because, for example in the case of the Management Area at the time of entry into force of the Registration Application, the Electronic File Application was only developed in relation to certain disciplinary procedures and resources.

For the other procedures the application is not fully developed yet, so this type of files is the only one that needs to be created, resulting in digitalization and cataloging of all mandatory documents related thereto, when referral to the Economic Administrative Courts is required.

Some issues are still pending, such as the fact that, as its already known, a great number of documents relating to the actions of the Management Area office, are not received by the general registry or by the electronic register, but which are provided by the taxpayer directly to the “counter” desk.

Moreover, most of the time, this documentation is the most important and / or numerous of all the background that at some point are to be included in the file.

It is very difficult for management Offices to digitalize, in any case and immediately, all that documentation that comes over the counter. To try to resolve the problem the Tax Computer Department has generated and put into production a utility that allows assigning an “electronic file number” to the files corresponding to different procedures. This number will allow linking all documents submitted by the taxpayer (thus facilitating proper storage and subsequent access) and other documents which are issued by the AEAT.

4.3 Social collaboration for electronic filing of statements and communications:

The Agency has expanded the possibilities for action by taxpayers through third-party representation, which must have a digital certificate, to carry out actions and proceedings over the Internet.

This figure of social collaborator, which fits the figure of tax advisers, is called enabled representation by the new general regulation for electronic access to public services.

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Since 2004 it was sought to overcome the difficulties of proving the representation for acting over the Internet and encouraging action before the Public Administration on behalf of third parties by electronic means.

This was established by the Resolution of February 2004, a record of proxies based on a software application that allows registering the powers granted by the citizens and companies to carry out those steps and actions that, in tax matters, could be made ​​via internet, at that time through the Agency’s website.

This is a computerized database and located on the Internet, live as it is modified by constituents and Internet-accessible with electronic certificate only.

In the Resolution of May 2010, it was stipulated that the accredited proxies should be incorporated to the registry in the following forms:

• Power granted by form suitable for this purpose, by personal appearance in the delegations and authorities of the Agency and, in the case of companies, by hearing the legal representative of the entity or person holding power to grant the authorizations.

• Power granted by a public document or private document signed by an entitled Notary, filed with the Agency.

• Empowered by the Internet using any of the identification and authentication systems provided by Law 11/2007.

Regarding the contents of the Register of proxies, the general powers of attorney by categories of procedures are included (filing, personal data query, reception of notifications and payment of taxes) and also the powers of attorney for specific procedures.

The powers of attorney can be granted to a person or persons except for reception of online communications and notifications. In this case it will only be issued to one person or entity.

At this time, social collaboration extends to the Internet presentation of claims for compensation and deferral or payments in installments.

4.4 Electronic notifications:

Under the new regulation, any individual or company is allowed to receive administrative notices electronically with total safety and integrity, either by electronic hearing notification (electronic

48 TOPIC 1.1 (Spain) access by the interested parties to the content of the corresponding administrative actions, providing the record of such access) or using an authorized e-mail address.

The electronic hearing notification can be received through the Electronic Office, by digital certificate or electronic ID.

The authorized e-mail Address is mandatory in certain cases (Corporations and Limited corporations, and for large companies), for which the Royal Decree of October 2010 has established the compulsory notification and administrative communication by electronic means in the scope of the Tax Agency.

In these cases, notifications are sent exclusively to the E-mail Address authorized by the companies and, within ten calendar days from shipment without being accessed, notifications are considered to be made.

An electronic certificate is needed or someone empowered with a certificate can access, but their absence does not prevent the notification system from becoming operational with all its effects.

In respect of notifications, in order to facilitate the use of this modality of electronic management, from 2012 it will not be necessary to have an eID or an electronic certificate to file certain documents related to notifications received from the Agency.

It will be enough to access the option “Submit documentation related to a notification received from the Tax Agency,” which appears within the block of “Outstanding procedures” of the electronic office, and to type the secure verification code (CSV), that the User will find in the footer of the first page of each document received from the Tax Agency as well as the NIF of the presenter.

4.5 Electronic payment, progress had been made ​​long before the law with the payment gateway, so that compliance with this requirement has meant less work.

The payment gateway of the Tax Agency allows the citizen to pay electronically by e-Check or credit or debit card.

It has also expanded the ability to pay by direct debit from the Bank.

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Additionally, there is also the possibility of paying tax debts through online banking services of Collaborating Entities, using the private keys that each bank provides to its customers.

Progress was also made ​​to allow the collection of letter of payment via internet and other series of value-added services in the area of Collection, such as the ability to submit requests for debt payment deferral, debt claim compensation, submit responses to the measures of seizure of wages, salaries and pensions etc.

Credit institutions may also carry out the consultation of measures of seizure of accounts and entities paying salaries, pensions and wages may, for example, answer requests. The citizen object of seizure measures have a number of features that allow for example calculating the seizable amount in the case of seizure of wages, salaries or pensions, answering embargo requests, obtaining letters of payment etc.

4.6 Online consultation of the processing status of files and electronic copy of the electronic documents that are part of the file

This means that, in general, the citizen does not have to ask for a consultation or a copy by completing a form and presenting it in the electronic registry, but with his electronic ID or electronic certificate can exercise these rights.

It should be noted, moreover, that all documents and certificates issued by the Agency, regardless of the route of their request, have a verification code so that the recipient can verify their authenticity and validity.

Therefore the Security Verification Code allows verification of the integrity of the electronic copy of this document and such verification can also be done through the electronic site.

5. AEAT STAFF TRAINING

The implementing electronic file work has also required making an effort in the training of the tax Agency staff.

This training began in 2009 and has been continuing since 2010 through the electronic channel (Intranet, e-learning, computer application “sametime” which allows instant messaging and real-time chat and virtual environment) and onsite sessions.

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A dissemination effort has also been carried outside the organization; as well as external training in collaboration with the National Institute of Public Administration, diffusion with social collaborators and participation to seminars and fairs.

The foregoing shows that the application of the Law 11/2007 that the Tax Agency is performing is very ambitious. It is not meant for a mere formal compliance with the law but it wants the object and purpose of the law to be fully effective, given that it benefits the citizen and supposes a reduction of administrative burdens.

The Tax Agency and generally the Ministry of Finance should continue acting as engine and impulse for the information society and also collaborate in activation of the economic activity.

The Spanish Administration is aware that it is engaging and dedicating significant resources to electronic channels, without prejudice to the non-electronic means, as the Agency would continue to maintain its onsite channel to relate to those citizens who do not wish to do so by electronics means.

6. ANALYSIS OF THE TAXPAYERS OPINION

The impression of taxpayers on the services provided to encourage voluntary compliance can be analyzed in Spain, thanks to surveys and studies by the Tax Agency and the Institute for Fiscal Studies (IEF).

Figures from the survey study of IEF “tax opinions and attitudes of the Spanish in 2010” shows that almost three quarters of surveyed (72%) are aware of the services provided by the Agency, but only four in ten use them .

As for the percentage of citizens who do not know and do not use the Tax Agency services, six in ten citizens do not use or do not know the electronic signature service and half of surveyed do not know or never use the Agency’s website.

However, on the other hand, only one in ten does not use or do not know the draft statements and information in the tax database.

The telephone information and face-to-face attention in the offices of the Agency are unknown or unused by 29% and 21% respectively.

Regarding the evolution of knowledge and use of services of the Agency, from 1995 to 2010, the trend in the relationship between

51 TOPIC 1.1 (Spain) knowledge and use of Agency services by taxpayers, comparing the level of knowledge and use 2010 with previous years shows a slight increase in the level of awareness of the Agency’s services, but the level of use remains the same.

The ratings on various support services show that all the services offered by the Agency have a very positive value (86% on average). Of these, the most valued service is the communication of tax data (for 91% of respondents responding), followed by the AEAT website and electronic signatures (for 90% and 89% respectively).

They are followed by the IRPF draft (for 87%), the attention given by officials to people that go in person to the AEAT offices (for 84%), leaving in the last place the telephone assistance to taxpayers, which is a good and very good service for 78%, but negatively valued by 22% of those who know it and have decided to give an opinion on it.

7. FURTHER INFORMATION ON ELECTRONIC ADMINISTRATION IN THE AEAT

Besides knowing the outcome of the surveys, to complete the analysis of the current situation it is interesting to know some facts about the electronic administration in the Tax Agency:

• Electronic payments: almost 3 million in 2010, including on-line payments through the AEAT, payments through electronic banking and payments in collaborator entities offices (IRPF). • Social collaborators: 3,857 agreements or accession protocols. • Powers of attorneys: 695,661 active powers of attorney in January 2011. Increase of 49% in one year. • Electronic Notices: 66,675 high in census (January 2011). • Number of income tax returns filed online 6.931036 in 2009. • 695,026 notifications and communications sent to 717,601 in January 2011

8. CONCLUSIONS

Although there is work still to be done in terms of effective use by citizens, the achievements so far are many.

1.-The pending work must create synergies with other sectors of Public administrations and the focus of decision making, so as to make policies that encourage the citizens demand, since the supply of electronic services is already broad.

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2.-It is necessary to achieve widespread use of electronic signature systems, in particular electronic ID and to optimize the effort and investment made ​​by the public administrations for themselves and for society in general.

3.-Efforts should be made for personalized services and for developing them in accordance with the demands and needs of citizens in order to overcome the cultural preference for personal attention.

All efforts in this field involve a clear improvement of the efficiency of tax administrations. In an economic crisis like today is important to adopt measures to improve efficiency and productivity of existing resources and the commitment to electronic administration is one of them.

Ultimately we may conclude that facilitating compliance plays an essential role in the Tax Administration Strategies. The harder it is to fraud or commits mistakes, the easier the fulfillment of obligations is; the more taxpayers will comply with legal requirements.

A relevant example to limit opportunities for evasion and error is the acquisition and processing of information provided by third parties, included or not and in the mandatory and periodic process of withholding taxes.

In this regard, information provided by these third parties, held by the Tax Administration and included in its database can be exposed to the taxpayer in the returns drafts that are provided. It is therefore an important element which, besides limiting the possibilities of error, strongly encourages compliance and, in turn, facilitates it.

But cannot forget that encourage tax compliance is a task based on knowledge of human behavior and influence in this behavior is a complex task.

Part of a successful strategy is to increase each day knowledge of this behavior and encourage cooperation with large companies and social collaboration with associations of professionals, customs brokers, notaries, registrars of property, financial institutions, taxpayer representatives, Tax Administration collaborators etc.

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Taxpayers are more likely to voluntarily comply when they believe that management is acting in a reasonable manner and in the new forums that are being created to facilitate the dialogue with these groups it is possible to develop strategies to show the efficiency and effectiveness of the Administration in the use of resources.

The electronic resources improve this compliance because they help the Administration to provide a better service and the taxpayer receives the message that the system provides more convenience, operates with more transparency and more efficiency, both in its procedures and its results.

In this sense, each time a taxpayer access our services is an opportunity to involve him in our strategy to increase voluntary compliance and to encourage the use of electronic channels.

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